Oil prices have increased following reports of supply cuts by Saudi Arabia to Asia.

Brent futures were up 30 cents and traded at $53.94 per barrel, while the US West Texas Intermediate (WTI) crude futures increased 29 cents and stood at $51.11 a barrel, Reuters reported.

Traders said oil prices edged-up after reports emerged that Saudi Arabia was cutting crude supplies slightly from contracted volumes next month to India, as well as Malaysia.

In order to plug any supply gap left by the Organization of the Petroleum Exporting Countries (OPEC) production cuts, traders in Europe and China are shipping 22 million barrels of North Sea and Azerbaijan crude to Asia this month.

"Traders continue to fret about rising US supply and compliance by OPEC to agreed-upon production cuts."

ANZ bank was quoted by the news agency as saying: "Traders continued to fret about rising US supply and compliance by OPEC to agreed-upon production cuts."

Data released by the US Energy Information Administration (EIA) revealed that crude production in the US this year may increase by 110,000bpd to reach nine million.

Energy companies worldwide are also set to increase spending by 3% to $450bn this year, Wood Mackenzie said.

OPEC output cuts are set to come into force this month; however, Iraq plans to increase crude exports from its southern port of Basra to 3.641 million bpd next month, keeping shipments high.